5月份消费韧性表现优于投资

AnalystEva YISAC No. S0570520100005SFC No. AMH263evayi@htsc.com+(852) 3658 6000 Huatai Research 17 June 2025│China (Mainland) Quick Take AnalystWU WanyiSAC No. S0570524090005SFC No. BVN199wuwanyi@htsc.com+(86) 10 6321 1166 Quick take on China’s May economic activity data Due to a low base in May 2024, China’s economic data for May 2025 showeda pattern of mom moderation but solid yoy growth. Specifically, externaldemand and industrial production slowed mom, while property sales andinvestment saw wider yoy declines. Consumption, on the other hand, posteda substantial upside surprise,although partly driven by one-off factors, inour view.With the‘export rush’effect fading and the increase in export ordersslowing under tariff uncertainty, May saw simultaneous yoy declines in exports,power generation, andindustrial output. Although broad-based fiscal expenditure(general public budget + government-managed fund) maintained high yoy growth,themom increases moderated after April,resulting in a weaker short-termcontribution to aggregate demand (Fig.1). Domestic and external demand factorscombined to heighten near-term economic growth uncertainty, weighing on marketrisk appetite and partially explaining the mom slowdown in property sales.The yoygrowth in retail sales of consumer goods was relatively stellar, which we attributemainly to the timing shift of 618 shopping festival and stronger-than-expected yoygrowth in travel activity during the May Day holiday. Considering the upcomingphase-out of trade-in subsidies and the implementation of policies targetingexcessive dining practices,we expect the sustainability of high retail sales growthto be subject to some uncertainty. AnalystWANG Mingshuo, CFA, PhDSAC No. S0570123070085SFC No. BUP051wangmingshuo@htsc.com+(86) 10 6321 1166 Key highlights from May economic data: 1)Export, power generation, and industrial output all moderated.Industrialoutput growtheased slightly from 6.1%yoy in April to 5.8%yoy in May.Export-oriented sectors like shipbuilding, electrical machinery, and electronicsremained resilient but saw slower growth vs March-April. Output growth intextiles, cement, and power generation also declined from already low levels. 2)Investment growth decelerated overall.Urban fixed asset investment (FAI)growth slowed from 3.5% yoy in April to 2.7% yoy in May. Both infrastructureand manufacturing investment yoy growth retreated from high levels,whileproperty investment contraction widened further. 3)Property demand softened marginally; developer funding has yet toimprove.The yoy declines in property development investment/commodityproperty sales area widened to-12.0/-3.3% in May, from-11.3/-2.1% in April.Property funding also deteriorated, with a 10.1% yoy decline in received funds(vs-5.3% in April), suggesting continued cash flowstress among developersand limited signs of stabilization in the property cycle, in our view. 4)Retail sales posted a major upside surprise, partly supported by one-offfactors.Total consumer goods retail sales growth rebounded to 6.4% yoy inMay from 5.1% in April, well above market expectations. We believe this waspartly due to the timing shift of 618shoppingfestival, which boosted onlinephysical goods retail sales by 8.2% yoy in May (vs 6.1% in April). Additionally,travel activity during the May Day holiday also contributed to retail sales ofconsumer goods, with total holiday travelers/spending up 6.4/8%yoy. Looking ahead, with an even lower base in the coming months,we expectthe yoy growth in various indicators to remain resilient.If policy supportstrengthens in the near term, it could help offset the risk of further momdeceleration–on one hand, uncertainty in external demand could continueto weigh on exports, production, and investment; on the other, with the 618shopping festival boost fading, retail sales growth may also demonstratevolatility.High-frequency port data suggests that the yoy growth in June exportsmay have softened further from May, indicating volatility in external demand. Withthe reciprocal tariff 'grace period' ending on 9 July, we suggest monitoring the riskof weaker trade growth after export rush. In addition, temporary pauses in home appliance trade-in subsidies in someregionscould disrupt the ongoing retail recovery in the short term.Overall,economic growth momentum may continue to moderate, in our view.Nevertheless,due to a low base in 2Q-3Q24, we expect the yoy growth in economic activity datafor 2Q-3Q25 to remain stable. With a high base in 4Q24 andthe front-loading ofthis year's fiscal spending potentially creating a funding gap, we believelate 3Q25to early 4Q25 may present a policy window for fiscal reacceleration and marginalmonetary easing(see our report on China's May total social financing data titledLoan Demand Weakened, published on 15 June 2025). Risks: China-US trade frictions exceeding our expectations; weaker rebound indomestic demand than we expect. 1.Industrialproduction:export,power gene